Maximum Fines for Auditors Found Guilty of Improper Conduct Gazetted

The new notice specifies maximum fines per charge, ensuring alignment between fines imposed following disciplinary hearings and those resolved through admission of guilt processes.

Finance Minister Enoch Godongwana has issued a new notice specifying maximum fines for registered auditors found guilty of improper conduct.

This follows a January 2024 notice calling for public comment on the withdrawal of the previously gazetted maximum fines from 15 June 2023 and the publication of new maximum fines.

"The purpose of Government Notice No. 4933 of 6 June 2024, which withdraws Government Notice No. 3549 of 15 June 2023 and sets new maximum amounts, is to stipulate the maximum fines for both sections 51(2) and 51B(3)(b) of the Auditing Profession Act, 2005, as amended, to apply per charge. The addition of 'per charge' in respect of fines imposed following a disciplinary hearing aligns with the imposition of fines for matters finalized through admission of guilt processes," stated National Treasury on Thursday.

After a 30-day comment period and a review of the comments received, the Minister determined the following maximum fines for auditors found guilty of improper conduct:

R5 million per charge for individual auditors who admit guilt, as envisaged in section 51(2) of the Act.

R15 million per charge for audit firms that admit guilt, as envisaged in section 51(2) of the Act.

R10 million per charge for individual auditors found guilty following a disciplinary hearing or who admit guilt, as envisaged in section 51B(3)(b) of the Act.

R25 million per charge for audit firms found guilty following a disciplinary hearing or who admit guilt, as envisaged in section 51B(3)(b) of the Act.

These fines will apply to improper conduct committed from 6 June 2024, the date of publication of gazette notice 4933.

"Therefore, the notice does not apply retrospectively, and the maximum fines promulgated by the Minister on 15 June 2023 will remain applicable for improper conduct committed between 15 June 2023 and before 6 June 2024.

"A framework guiding the implementation of these maximum fines in a proportional and scalable manner will be issued by the Independent Regulatory Board for Auditors (IRBA) for public comment before adoption by the Board," National Treasury concluded.